Housing loan interest rate formation

From Oct 8, the interest rate of newly issued commercial individual housing loans will be based on latest month's loan prime rate of the corresponding term, while certain basis points will be added, the People's Bank of China said on Aug 25.

The basis point addition should be in line with national and local housing credit policies and remain unchanged during the housing loan contract term.

The housing loan interest rate for first-time buyers should not be lower than the LPR of the corresponding term, while that for second-time buyers should not be lower than the combined level of the LPR and 60 basis points.

The loan interest rate for commercial-purpose housing should not be lower than the combined level of the LPR of the corresponding term and 60 basis points, while interest rate policies for individual housing loans via one's housing provident fund will stay unchanged.

Housing loan contracts already inked or in implementation will not be affected by the new rules.